Assisted living: You can’t take it with you

January 8th, 2010 by Philip Brasor & Masako Tsubuku

If you can read the fine print then you can’t move in

Advertorial supplements are pretty common these days in newspapers, and often they focus on one subject. A topic I see a lot lately is assisted living facilities for seniors, sometimes two or three times month. Despite Japan’s storied respect for the aged, old age homes, derisively referred to as rojin homu, were never very popular until the last decade when the kaigo hoken (nursing care insurance) system was enacted, thus directly and indirectly providing government assistance for start-up businesses. With the economy lagging and the population aging faster than you can say “hip replacement surgery,” assistant living facilities have become a growth business, though if you take a look at the ads in the supplements it’s easy to get the feeling that all old people in Japan are rich.

The main sticking point is the “moving in fee” (nyukyohiyo), which tends to run anwhere from ¥50 to 90 million; in other words, the price of an expensive house or condominium. These fees are “deposits” to a certain extent. Usually about 10 percent are automatically deducted when a contract is signed, and then over the next 10 years it is treated like depreciation. If you “leave” the facility before the 10 years elapses an appropriate portion of the deposit is returned to you or our heirs depending on how long you have stayed. Of course, “leaving” in most cases means “dying,” so you get the idea. On top of that, the “tenant” pays a substantial monthly rent for his or her unit, which can be a simple room or a full apartment with kitchen. Then there are lots of add-ons, the main one being meals, but, of course, with assisted living there tend to be different grades of “care.” That’s where the real money comes in. One’s monthly rent can double or triple depending on one’s physical condition.

Since the kaigo hoken law was passed in 2000, more large companies have entered the nursing home and nursing-care business. The most famous was Goodwill, which had to leave the business after a licensing scandal some years ago. A cursory look at the ads in the nursing home supplement in my daily newspaper reveals what kinds of companies have gotten into it: real-estate developers, of course (Tokyu), but also cram and correspondence schools (Nichii), and food service companies (Watami). The point is that old people can use their kaigo insurance payments to pay for their nursing care, but obviously the money they get from the government isn’t going to be enough to move into these sort of private facilities, which are quite deluxe.

The majority of Japanese oldsters will have to opt for public or semi-public facilities, which are also increasing in number. Many of these facilities are located in remote rural areas where land is cheap. These tend to be tokuyo homes, meaning “special use.” Local governments are reluctant to build nursing homes and so they allow private operators to open facilities with fairly relaxed conditions. Residents of these facilities actually tend to come from the big cities, where local governments don’t want to spend money on poorer old folks by subsidizing their rent, and so they ship them off to these facilities along with their welfare benefits. Tokuyo nursing homes are cheaper, and they look it. Food services tend to be the bare minimum. Last March ten residents of a tokuyo facility in Gunma Prefecture died in a fire. The nursing home was not by law required to install sprinklers.

As the more well-off boomers start entering such facilities it’s likely that matters will improve, but at present the options — extremely expensive private care homes or public and semi-public facilities that feel more like prisons or hospitals — are limited. At present nursing-care services, whether they be in dedicated facilities or at home, are being spurred by the economic downturn and the whole employment issue, but there are other growth areas to be exploited with the aging of society. These supplements also have ads for funeral services and graveyards.

Yen for Living is produced by Philip Brasor, a freelance writer-for-hire, and Masako Tsubuku, a freelance translator and interpreter. They are currently working together on a book about Japanese housing that will probably never be finished. In the meantime they have their own blog on the subject: Cat Foreheads & Rabbit Hutches. You can read more by Philip at philipbrasor.com.